It may be EMS math 101, but the cost of a fully (paid) crewed, operational, fueled and supported ambulance running 24/7/365 runs into hundreds of thousands of dollars (8,760 unit hours per truck, per year, for full-time members of staff, plus all the supporting works, is in the ball park of $350,000). Depending on the peak of day requirements, which multiplies the baseline, as well as other standby and community support activities, the pure cost of doing business spirals up very quickly. Chiefs know their own numbers and understand that the cost of readiness is not cheap, even in the volunteer and not-for-profit sectors. Understanding the bottom line, P&L, EBITDA and the general fact that everything costs something is a story we must all be prepared to accurately tell in order to survive.
In the news this week, we saw more stories of the daily struggle that organizations are facing to remain both staffed and funded. The Minnesota Department of Health revealed 80% of the state’s rural ambulance services rely on volunteers, and 60% of volunteer services are short-staffed. The solution inevitably will require the installation of paid staff, which presents the twin issue of funding and sourcing the appropriately certified clinicians – who live there or are prepared to move.
Meanwhile, in Ohio, the debate in a local council chamber centers on whether they want to pay to keep EMS squads operating in their locality. The underlying issue with this story is one of affordability, and is a scenario that is being played out across the country. Not far up the Turnpike in the metro Flint, Michigan, area, medical calls for service have exceeded the budget for two straight years in a row. The resultant action may well be a raise in levies, charges and taxes, which is always a politically sensitive issue, or even to put the service out to competitive bid, itself a political hot potato.
The reality of doing what we do is that EMS is a business, like it or not, and like any business, income must at least equal or exceed expenditures to remain solvent and afloat. Even not-for-profit does not mean all for free! Sitting at the heart of the matter is one of my many elephants in the room – that of reimbursement and appropriate funding. We have recently arrived at the point where we have a federal opportunity to demonstrate the true costs of doing business, which, in turn, may lead to fair and appropriate reimbursement, which may assist with the news issues of the week.
Takeaways
Here are my takeaways on the cost of doing business in EMS.
1. Continued legislative change
Funding and reimbursement for our industry is our lifeblood and it is essential that we continue to support legislative efforts to continue and expand reimbursement into all corners of our profession. This is everyone’s responsibility and participation in such events as NAEMT’s EMS on the Hill or the American Ambulance Association’s legislative “fly ins” puts uniforms in front of policy and law makers and keeps issues and priorities fresh in their minds.
2. Education and transparency with locally elected officials
On a local basis, education and briefing is an essential function. In areas where EMS is delivered by volunteer or combination (volunteer/paid) services, understanding the true cost of service delivery is essential. Highlighting the cash value of volunteer hours delivered can be a sobering number to local politicians as this is usually an unfunded mandate. In the era where volunteering is sadly a diminishing return that must be replaced with permanent staff, the potential financial timebomb must be highlighted.
Shaking the boot outside of the local supermarket will no longer yield enough to support the bottom line. This may even lead to the introduction of billing practices that never existed before and, while the mechanism of reimbursement exists, explaining that to the voting public may be challenging and emotive, so brief early and know your numbers.
3. EMS Cost Survey
As we all now know, in 2018, the Bipartisan Budget Act of 2018 was signed into law with a requirement for collecting cost and other financial data. Under this program, financial data – including revenue, utilization and cost data – will be collected via surveys. Select organizations have now been tapped to provide that information across the entire breadth of U.S. EMS, and collection software is being developed and beta tested. This is an essential activity and much more than a simple exercise in feeding the beast – we must give this maximum attention as it will determine the economic success of our industry as we tread the pathway towards EMS 2050!
[If your ambulance service has been selected to participate in the first year CMS Ambulance Cost Data Collection program, there are five steps you must take immediately to prevent a reduction in reimbursement. Read: 5 immediate action steps for Ambulance Cost Data Collection participants]
